It’s time to recession-proof your brand. Recent economic reports highlight market issues like higher inflation, interest rate hikes, lower consumption, layoffs, and reduced hiring. Together, these trends point toward an economic slowdown and potential recession.,
However, there’s no need for consumer packaged goods (CPG) brands to panic. Economic downturns are a natural phase of the business cycle. Many factors remain within a brand’s control, including marketing efforts. That’s why we’re sharing the following marketing best practices to help you grow your top line, even in a recession.
Pause to plan
Recessions can create lucrative new business opportunities because market conditions change. To adapt to market uncertainty, re-examine your marketing strategy to stay focused, clarify your priorities, and optimize your resources.
Since consumer habits have shifted due to the pandemic, supply chain disruption, and rising inflation, research your market for the latest data. Incorporate these insights into your marketing plan to accurately reflect consumers’ evolving needs, competitive moves, and market risks, and align with these trends to gain an advantage.
“Throughout a downturn, all consumers …
typically re-evaluate their consumption priorities.”
Pay attention to how an economic downturn affects your target customers’ discretionary income and purchasing decisions. For instance, do they change their behavior if leading brands in your category use shrinkflation to stabilize prices? Also, consider whether simplifying your marketing strategy by streamlining your SKUs could free up your team to focus on promoting only your bestsellers and unique products.
Invest more in marketing
When recessions hit, too many companies make the knee-jerk reaction of cutting their marketing spend. By going in the opposite direction and marketing your brand more, you’ll face less competition and improve your likelihood of growing sales and market share.
Marketing and advertising are crucial during a recession.
Companies that invested in marketing saw their numbers grow.
Resist the temptation to overhaul your brand during a recession to avoid confusing your current customers and losing sales. Retain your current company name, branding, marketing, and frequency of outreach throughout the recession to control marketing costs and protect brand trust.,
Get your pricing right
Setting an acceptable price is table stakes, especially since recessions make consumers far more discerning with their purchase decisions.
Recent inflation increases have already attracted more consumers to value-tier products, bargain hunting, and private labels. In response, you could offer limited-time deals, volume discounts, freebies, bundles, value-added loyalty memberships, or after-purchase bonuses to entice price-conscious consumers to buy. If your product has a higher price and flexible margins, dropping the price could improve your reach and sales by making it affordable to more consumers.
Conversely, product quality, innovation, and popular features can command a premium even as the market contracts, so evaluate how changes to your pricing strategy could help you maximize profits.
Go to your audience
Make product discovery easy by getting your brand in front of your dream customers where they already spend their time by using:
- Social media: Establish a solid brand presence across your audience’s most relevant platforms, which may include Instagram and TikTok. A robust social presence can drive interested consumers to your online store.
- Digital advertising: Boost your online visibility and sell around the clock with digital advertising. Use campaigns to emphasize qualities that make your products and brand in-demand and relevant. These qualities could range from consumer values (like sustainability and diversity) to specific keywords used in online searches (like certified organic or hypoallergenic).
- Local marketing: Reach consumers in your area through targeted local campaigns and trade networks with regional retailers. Beyond serving the people in your local community, you can lower your logistics costs by shortening your supply chain.
Love those who love you
Why waste time and money by chasing unrequited brand love? Instead, double down on satisfying your most valuable customers and biggest supporters, especially during a recession. According to research, the probability of selling to an existing customer is 60% to 70% (vs. only 5% to 20% for a prospective customer). In addition, repeat customers spend an average of 31% more than first-time customers.
“During recessions … remember that loyal customers are the
primary, enduring source of cash flow and organic growth.”
That’s why it can pay off for you to commit to the audiences who are most receptive to your brand and products. These loyal fans are also most likely to amplify your marketing reach through word-of-mouth across their social media networks and relevant communities.
Modernize your marketing
To convert more online shoppers, invest in sales tools like augmented reality (AR) and livestreaming. These innovations can promote trust among online shoppers by giving them more information about your product’s fit and suitability for their individual needs. For example, beauty brands can use AR to assure a shopper that a foundation matches their complexion or a lipstick color looks flattering on them.
Know you’re not alone
Running a business is tough in any economic climate. Fortunately, many resources exist to help support the success of business owners like you.
Start by speaking to experts in your niche, especially those whose businesses survived the last recession to learn which marketing strategies and tactics worked for them. Seek advice from financial and business advisors, and fellow entrepreneurs to understand what you should and shouldn’t do during the economic downturn, including the following organizations.
Financial aid groups
Entrepreneur support groups
Overall, these marketing best practices can keep you resilient and prepared to keep selling in a recession. Plan ahead, focus your limited resources, and access business resources so you can thrive even amid an economic downturn.